As you or a family member are preparing to get back into a school routine, please take the time to read these 5 financial tips. At ChoiceOne Bank we understand that paying for an education can be daunting today. These 5 financial tips are actually pretty simple yet will take some time. But they will help you to prepare to graduate college with good credit and manageable debt.
Budgeting is so important for college students. Oftentimes, this is the first-time students have been on their own (or almost on their own) and start to make decisions about how to spend money. Many college students have money from high school graduation, allowances from family, student loan money or their own savings. It’s important to create a budget and more importantly – stick with it.
- Always Use Grants & Scholarships First
Many students are unaware of the grants and scholarships available to them. It’s important to discuss these opportunities with guidance counselors at your high school or college. Dig in and do some research on your own, too. At ChoiceOne Bank we offer high school students the opportunity to apply for a $500 scholarship by writing an article on community. There are many of these opportunities – it just takes some time to find them. This is a case where every little bit helps!
- Build Your Credit
Now is a perfect time to start building credit. It’s so important for college students to understand this …whenever we are using something that we will need to pay back – we are building credit. For example, if students are using services like electricity, cable, credit cards or internet, they have usually signed an agreement to pay for these services. With credit cards, there is an agreement to use money with the intent of paying it back. Students will build excellent credit when they start to pay bills and commitments on time. Even if roommates still owe for their portion of the bill, the commitment must be paid on time to build and keep excellent credit. ChoiceOne Bank has an excellent product to help students build credit. Using a credit card can also help build worthy credit. But, see next tip!
- Don’t Misuse Credit Cards
One of the first things college bound students see when entering any college campus are credit card offers! They usually come with some free gift offer for completing a credit card application. This is actually a great way to begin building credit – but it is also one of the most dangerous for anyone not familiar with using this type of credit. Credit cards offer the opportunity to borrow money, for a fee which is typically a high interest rate. If the credit card balance isn’t paid in full each month, there is a service fee/charge based on the interest rate agreed upon when completing the credit card application. Without an understanding of how the interest rate is charged to the outstanding balance, many college students get into debt because their fees begin to grow larger than the monthly payment they are able to make. Please visit us to learn about credit card options and what students need to know about interest rates before using a credit card.
- Apply for FAFSA
Many students and their parents fail to complete the Free Application for Federal Student Aid (FAFSA) for many reasons – two of which are they don’t think they will qualify or it’s simply too difficult. But we urge all college students and parents to complete this application because you actually might qualify for some form of financial aid.
Please know we are here for you to offer more information on any of these 5 financial tips for college students and offer financing resources like College Ave Student Loans. Let’s make sure you graduate with great credit and debt you can manage.